Here are the key economic concerns that continue to haunt Hong Kong

The territory will still suffer from the mainland's structural problems.

According to BMI Research, Carrie Lam stated in her campaign that she will focus on boosting the Hong Kong economy over political issues, and indeed, we acknowledge that her administration has the capacity to boost fiscal spending due to the SAR's strong fiscal reserve position.

"That said, in our view, Lam's government is unlikely be successful in boosting the territory's economic growth due to mounting external and domestic challenges. On the external side, the Hong Kong economy, which has deep trade links with China, will suffer from the mainland's structural problems such as significant excess capacity in its industrial sector and corporate debt overhang."

Here's more from BMI:

Moreover, Lam's victory came about from the strong backing by the pro-Beijing group, and therefore, we believe that she will continue to promote greater economic and financial integration between the territory and the mainland over the coming years.

This could create additional volatility for the SAR as the territory faces threats from maturing capital markets in the mainland. In addition, the potential of rising protectionism under the Donald Trump administration creates uncertainty for the small and open economy.

On the domestic front, Hong Kong's domestic demand continues to face significant downside risks from an extremely expensive housing market. We believe that factors such as worsening affordability, rising interest rates amid the US Fed rate hiking cycle, and government policies such as increasing housing supply and curbing of speculative activity will all weigh on the real estate market.

Furthermore, the Hong Kong economy is also facing long-term demographic headwinds amid the decline in the proportion of the working population as the population ages.